Mental Capacity

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IcebergSpotting undue influence is no easy task for estate planning attorneys. When Mom wants to change her trust to favor Sally over Johnny, Mom presumably is making her own choice for her own reasons. But it’s also possible that Sally, behind the scenes, is pushing Mom to make the change.

An estate planner is like a mariner viewing an iceberg. The top 10 percent of an iceberg is visible above the ocean’s surface while the bottom 90 percent is unseen and potentially hazardous. A planning attorney typically interacts with the client for a relatively brief period of time outside of the client’s home, and is unfamiliar with the events that led up to the client’s arrival. So what can the attorney do to look out for undue influence?

The California Court of Appeal blocked Donald Sterling’s last second shot at undoing the sale of the Los Angeles Clippers. Donald sought to overturn the results of an eight day trial that occurred in July 2014. The opinion, issued on November 16, 2015, should be of interest to settlors, trustees, and beneficiaries of “ordinary” trusts in California that do not hold a $2 billion NBA franchise.

The Court of Appeal hammered Donald for procedural deficiencies with his appellate briefs before ruling against Donald on all three issues on appeal. The court held that: (1) Donald was properly removed as trustee on the basis of his incapacity; (2) the trial court appropriately allowed the sale of the Clippers despite the pending appeal; and (3) Donald’s effort to revoke his trust was ineffective to stop the sale of the Clippers.

Inheritance fights are nothing new, nor is public fascination with them. Charles Dickens published Bleak House in 1853, satirizing the English legal system in the context of the fictional case of Jarndyce v. Jarndyce. More recently, John Grisham’s Sycamore Row, released in 2013, was at the top of the New York Times best seller list.

Are trust and estate disputes on the rise in California? I haven’t seen hard evidence on one side or the other, but it seems that a confluence of factors creates a rising tide.